The International Energy Agency (IEA) published its annual World Energy Outlook (WEO) this month. The IEA states in its WEO 2010 - Executive Summary:

"Crude oil output reaches an undulating plateau of around 68-69 mb/d by 2020, but never regains its all-time peak of 70 mb/d reached in 2006, while production of natural gas liquids (NGL) and unconventional oil grows quickly."

The introductory paragraphs of John Collins Rudolf's recent article in the New York Times comments on this key point from the WEO 2010:

"Peak oil is not just here — it’s behind us already.

"That’s the conclusion of the International Energy Agency, the Paris-based organization that provides energy analysis to 28 industrialized nations. According to a projection in the agency’s latest annual report, released last week, production of conventional crude oil — the black liquid stuff that rigs pump out of the ground — probably topped out for good in 2006, at about 70 million barrels a day. Production from currently producing oil fields will drop sharply in coming decades, the report suggests."

Figure 1: Projections of the world’s liquid energy sources to 2035.

........It is interesting to note that in the WEO 2010 figure for "World oil production by type in the New Policies Scenario" (see Figure 1 and 2), the decline in production of "currently producing fields" of crude oil is suspiciously offset by crude oil production from "fields yet to be developed" and "fields yet to be found", thereby keeping global conventional oil production flat through until 2035 (see Figure 2). Coincidentally, this offset in decline helps the projected global oil production to be able to nearly supply global demand by 2035. TheIEA published a similar graph in the WEO 2009, in which the decline of global conventional crude oil production was offset almost exactly from "fields yet to be developed" and "fields yet to be found" (see Figure 3). Figure 3 was published in Peak Energy, Climate Change, and the Collapse of Global Civilization as Figure 15.

Figure 2: Projections of the world’s liquid energy sources to 2035.

Nevertheless, these supposed "yet to be developed" and "yet to be discovered' fields will unlikely be able to offset the terminal decline of global oil production as depicted in the IEA's graph:

1. Many of the "yet to be developed" fields cannot be developed due to high capital and production costs, and because of a substantial lack of investment and decaying infrastructure. The current global economic crisis will further limit access to investment. While reduced demand due to high oil prices will make the remaining hard to get, low quality oil too expensive to produce.

2. No one knows whether the "yet to be discovered" oil fields actually exist, much less whether they are even viable to produce at a market price. Since oil field discoveries peaked in 1960 and have seriously declined since, it is very unlikely that much or any of this supposed undiscovered oil will be ever found or put into production at a market price.

If the IEA projection that global oil production peaked in 2006 is accurate within +/- 4 years, then it is likely that global civilization is currently experiencing the terminal decline of oil production. Without tremendous amounts of energy to support the current global economy and its requirement for unlimited growth, the systemic collapse of the economy and industrialized society will likely accelerate. These points are all discussed in detail in Peak Energy, Climate Change, and the Collapse of Global Civilization.

Figure 3: World oil production by source in the IEA's WEO 2008 Reference Scenario2. The red wedge denoting “crude oil - fields yet to be found” increases the upward trend of the overall production curve above it to about 103 mbpd by 2030, which allows this supply curve to nearly match the IEA's projected rate of oil demand of 105.3 mbpd by the same year.

.The WEO 2010 and further analyses and commentaries can be found at the links below:

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Oil Prices

In mid-2004, oil prices increased from the range of $20 - $40 per barrel to $60 - $80+ per barrel. The current global economic crisis was triggered in part by the oil price shock starting in 2007 and culminating in the summer of 2008. When prices increased from around $80 per barrel to $141 per barrel by the summer of 2008. The global economy crashed within months in the autumn of 2008. This economic crisis will likely accelerate and become more volatile once oil prices exceed around $85 per barrel for an extended time. Demand destruction for oil may be somewhere above $80 per barrel and below $141 per barrel. Economic recovery (i.e., business as usual) will likely exacerbate the global recession by driving up oil prices.

Author

Tariel Mórrígan earned his B.A. in Physics from the University of California at Santa Barbara. He received his Master in Environmental Science and Management (MESM) from the Donald Bren School of Environmental Science and Management at UC Santa Barbara, where he specialized in climate change, conservation, and political economics. Mórrígan is currently the principal research associate of Global Climate Change, Human Security & Democracy (GCCHSD) and a member of its Global Academic Board. His most recent publication is Peak Energy, Climate Change, and the Collapse of Global Civilization: The Current Peak Oil Crisis.